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Serious question, how is Bitcoin fundamentally different from gold? Based on a "tether to reality", gold is massively overvalued if you consider its industrial

Serious question, how is Bitcoin fundamentally different from gold? Based on a "tether to reality", gold is massively overvalued if you consider its industrial or practical utility. Furthermore, gold is heavy and thus impractical to use in day to day transactions, just like Bitcoin. There are altcoins, but then there are also alt-metals (granted a lot fewer of them) such as silver, platinum, palladium, etc. The way I see it, bitcoin is just like gold except you can also trade it online.

pesmhey 9y ago
One thing that maybe differentiates it in the way you’re defining it: you can really see it. Gold jewelry, trinkets have social significance, and have for quite a long time. Crowns, regal adornments, religious altars, etc. are all ostentatious displays of gold, and whatever power structure exists to show it off. The counterpoint to this Is maybe that all of the US gold is housed in secret? Most nations don’t actually display gold wealth in the ‘traditional’ way? These aren’t rhetorical questions, I’m genuinely curious if I’m seeing this from a sound point-of-view. Nobody’s wearing bitcoin crowns or sitting on bitcoin thrones. Is there an equivalent? Does it even matter?
dmitrygr 9y ago
Actually, considering more than 70% of gold being bought is NOT for monetary purposes[1], I'd say it is not overvalued. It is valued exactly at its market value: for jewelry, for industry, for dentistry, etc. [1] https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in...
tlb 9y ago
Gold is pretty light for its value. A gram of gold is worth about $50, whereas a US dollar bill (of any denomination) also weighs 1 gram. So gold is 2.5x denser than $20s. The main flaw with gold as a currency is that it's tempting to shave little bits off each coin so you can melt the shavings into some new coins. Or recast them with 20% lead. Paying in gold coins involved the buyer searching through his pockets for the lightest coins he could foist on the seller, and the seller skeptically hefting and biting them.
vec 9y ago
> Serious question, how is Bitcoin fundamentally different from gold? So there are a handful of assets (gold, silver, jewels; generally stuff you'd expect to find in your average pulp fantasy treasure chest) that are essentially ancient speculation bubbles that never popped. They're valuable because there valuable. The optimist view of Bitcoin is that it's going to be the newest member of that august club. The bad news is that most of the list predates money as we understand it. It's not entirely clear if new gold-class assets even can be created anymore. The worse news is that the list is getting shorter. Aluminum used to be the stuff of kings, now we make candy bar wrappers out of it. Indigo, spices, pearls, turquoise. They all spent centuries as treasures until they weren't. Diamonds are starting to fall off, although it'll probably take a few decades. All of these were once extremely scarce and became a lot more common for one reason or another. And Bitcoin itself is limited, but any idiot can fork off their own altcoin. It's possible that in a few hundred years a Bitcoin will be just as much "treasure" as a bar of gold, but that's still far from a certain thing.

pesmhey 9y ago

One thing that maybe differentiates it in the way you’re defining it: you can really see it. Gold jewelry, trinkets have social significance, and have for quite a long time. Crowns, regal adornments, religious altars, etc. are all ostentatious displays of gold, and whatever power structure exists to show it off. The counterpoint to this Is maybe that all of the US gold is housed in secret? Most nations don’t actually display gold wealth in the ‘traditional’ way? These aren’t rhetorical questions, I’m genuinely curious if I’m seeing this from a sound point-of-view. Nobody’s wearing bitcoin crowns or sitting on bitcoin thrones. Is there an equivalent? Does it even matter?

dmitrygr 9y ago

Actually, considering more than 70% of gold being bought is NOT for monetary purposes[1], I'd say it is not overvalued. It is valued exactly at its market value: for jewelry, for industry, for dentistry, etc. [1] https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/ https://www.statista.com/statistics/299609/gold-demand-by-in...

tlb 9y ago

Gold is pretty light for its value. A gram of gold is worth about $50, whereas a US dollar bill (of any denomination) also weighs 1 gram. So gold is 2.5x denser than $20s. The main flaw with gold as a currency is that it's tempting to shave little bits off each coin so you can melt the shavings into some new coins. Or recast them with 20% lead. Paying in gold coins involved the buyer searching through his pockets for the lightest coins he could foist on the seller, and the seller skeptically hefting and biting them.

vec 9y ago

> Serious question, how is Bitcoin fundamentally different from gold? So there are a handful of assets (gold, silver, jewels; generally stuff you'd expect to find in your average pulp fantasy treasure chest) that are essentially ancient speculation bubbles that never popped. They're valuable because there valuable. The optimist view of Bitcoin is that it's going to be the newest member of that august club. The bad news is that most of the list predates money as we understand it. It's not entirely clear if new gold-class assets even can be created anymore. The worse news is that the list is getting shorter. Aluminum used to be the stuff of kings, now we make candy bar wrappers out of it. Indigo, spices, pearls, turquoise. They all spent centuries as treasures until they weren't. Diamonds are starting to fall off, although it'll probably take a few decades. All of these were once extremely scarce and became a lot more common for one reason or another. And Bitcoin itself is limited, but any idiot can fork off their own altcoin. It's possible that in a few hundred years a Bitcoin will be just as much "treasure" as a bar of gold, but that's still far from a certain thing.